- Crypto venture capital firms are making fewer high-risk investments and applying more scrutiny to potential projects.
- There is a noticeable shift in VC interest away from new blockchain infrastructure and layer 1 chains due to market fragmentation.
- Experts say recent project funding often depends on projected revenue, not active user bases.
- Funding for crypto startups dropped 59% in the second quarter of 2025, with deal numbers also down.
- Large investments, like the $750 million secured by Strive Funds, are now focused on projects with more concrete returns.
Crypto venture capital firms are reducing risky investments and becoming more selective as funding drops across the industry, according to leaders speaking at Token2049 in Singapore. Recent quarters show both investment amounts and the number of deals declining as investors look for stronger evidence of project viability.
Bullish Capital Management director Sylvia To said VC investors are no longer backing new projects based purely on trends. “VCs are a lot more careful now. It’s not just a narrative play,” To said in an interview, emphasizing the need for critical evaluation of real usage and transaction volume before investing.
Funding is now moving away from new blockchain networks, also known as layer 1 chains. To noted that previous investments in these areas have led to a fragmented market. “You really have to start thinking, there’s all this infrastructure being built in the industry, but who has been using it? Are there enough transactions? Is there enough volume coming through these chains to justify all the money being raised?” she explained.
To added that many projects in 2025 raised money at high valuations based on future potential rather than active revenue streams. “The potential revenue and the pipeline they’ve got aren’t solidified,” To said.
Ajna Capital chief investment officer Eva Oberholzer shared a similar view. Oberholzer told Cointelegraph that firms are now seeking projects with more predictable revenue, reliance on institutions, and clear signs of long-term adoption.
According to Galaxy Research’s second quarter 2025 report, crypto and blockchain startups raised $1.97 billion across 378 deals, representing a 59% decrease in funding and a 15% fall in deal count from the previous quarter. Over the three months ending June 2025, total crypto venture capital investment reached $10.03 billion.
The period also included significant investments such as Strive Funds acquiring $750 million in May to develop strategies centered on Bitcoin. For additional data, see Messari’s report on crypto venture weekly.
Ongoing shifts in crypto VC highlight a more cautious approach, focused on sustainable growth and proven project demand.
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